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14 marksOverheads and Manufacturing Accounts

CAPE Accounting Unit 2 · 2008 · Paper 2 · Question 1(c)(ii)

Cox Manufacturing Company has three service departments (Administration, Janitorial, Maintenance) and two operating departments (Cutting & Stitching, Assembly), with given overhead costs and activity measures. Service department costs are allocated using the direct method.

Calculate the amount of overhead cost that will be assigned to EACH operating department.

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Other parts of this question

  1. 1(a)(i)Compute total direct materials.[2 marks]
  2. 1(a)(ii)Compute total indirect labor.[2 marks]
  3. 1(a)(iii)Compute total factory overhead.[3 marks]
  4. 1(a)(iv)Compute total product cost.[2 marks]
  5. 1(a)(v)Compute total period cost.[2 marks]
  6. 1(a)(vi)Compute total variable manufacturing cost.[2 marks]
  7. 1(b)(i)Assuming that Cox Manufacturing Company has the production capacity to fill this order without affecting existing production, list the categories of costs that…[2 marks]
  8. 1(b)(ii)Cox Manufacturing will not accept the order if the company will be worse off financially by so doing. Calculate the minimum price that Cox Manufacturing…[3 marks]
  9. 1(c)(i)Calculate the allocation rate for EACH service department.[3 marks]

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